More from the 19th National Congress of the Communist Part of China   
 
The 19th National Congress of the Communist Party of China voted to expand the party constitution to contain the "Chinese Dream" which includes promoting One Belt One Road construction and combatting corruption. In addition, the conference added "Xi Jinping's Thought On Socialism with Chinese Characteristics for a New Era" into the party constitution. Xi Jinping laid out his plans for new international cooperation and a vision for further accelerating Chinese development in the developing world. This, coupled with the increasing isolationism of the Trump-led United States, could be a sign of a shift in global development finance.  


ADB News                                        
 
The ABD is providing 1.2 billion USD for the second phase of the Dhaka-Northwest international trade corridor upgrade. The project will aid regional prosperity, aligning with the ADB-supported South Asia Sub-Regional Economic Cooperation program. Road infrastructure is crucial to Bangladesh, and the project includes improvements along roads from Elenga through Hatikurul to Rangpur, strengthening the Roads and Highway Department, and road safety efforts focused on women. Read more here.
 
As the Duterte administration moves forward with its “Build, Build, Build” initiative to enhance and rebuild the infrastructure of the Philippines, the ADB has pledged a loan of 100 million USD. These funds will be channeled to the nation’s Infrastructure Preparation and Innovation Facility. The Philippine Department of Public Works and Highways will use the funds to work on 75 flagship programs developing large-scale, modern railway and highway systems, as well as airports, seaports, and flood control systems. These projects are expected to last into 2022. Read more here.  
 
The ADB is loaning 65.5 million USD to India to mitigate coastal erosion in the state of Karnataka. The loan has a 20-year term and is the second tranche of the 250 million USD financing plan under the Sustainable Coastal Protection and Management Investment Program. The State of Karnataka's Department of Public Works will implement environmental projects to protect the state's coastal economic sectors. Read more here and here.
 
The ADB approved a 200 million USD loan for the Ceylon Electricity Board to develop the first 100-megawatt wind park in Sri Lanka. Population access to electricity in Sri Lankan has grown from 29 to 99 percent. The project will develop wind energy in a country that desperately needs more renewable energy resources, as two-thirds of Sri Lanka’s power comes from coal and oil.  Read more here.
 
The ADB sold a 1.5 billion USD global benchmark bond in the US dollar bond market. The bond matures in 10 years and will pay off to the new investors in November 2027. The majority of the bonds were purchased in Asian trade markets by central banks and institutions. The ADB provides the terms of the bond on their website.
 

The ADB funds the Central Asia Regional Economic Cooperation Program
 
The ADB is committing 5 billion USD to support the Central Asia Regional Economic Cooperation (CAREC) program for the next five years. CAREC is a cooperative operation focused on developing Central Asian member countries. The program seeks to expand infrastructure, social services and the general economic abilities of its members. The corridor is also funded to help facilitate energy trade, general trade and easier connectivity between those involved. 
 
The ADB's investment will support the CAREC 2030 plan and will fund projects that include a Turkmenistan-Afghanistan-Pakistan transmission line project and other regional projects. The ADB is allotting an 800 million USD Multi-Tranche Financing Facility for the CAREC program to develop roads in Pakistan. Finance Minister Ishaq Dar embraced the program when he noted the geo-strategic importance of Pakistan's location for trade in the region. Read more here.
 

Chinese investment in Egypt
                                       
The Egyptian trade minister is talking with the ADB in search of funding for infrastructure projects, including additional funding of small and medium sized solar power projects that need up to 210 million USD. Meanwhile, China has invested in other renewable energy projects in Egypt. Alongside the World Bank and other regional and international banks, the AIIB and the ADB will invest to construct 13 solar plants in the solar park of Benban, outside of Aswan, Egypt. This project is expected to amount to 653 billion USD and will be one of world's largest solar parks, with 32 solar plants. Read more here, here and here.
 
The AIIB will provide 210 million USD to 11 Egyptian solar PV projects with its PPP model, reducing their risks by distributing funds among various private and public capitals. This investment shows the AIIB commitment to reducing CO2 emission and their support of clean energy, but thus far, the AIIB has not considered nuclear energy due to lacking expertise. Read more here.
 
On October 25, the three-day Egypt-China Investment and Trade Fair began in Cairo, featuring over 70 exhibitors. The Egyptian General Directorate of Investment was invited to explain Egypt's new "Investment Law" so more Chinese enterprises can understand the current investment environment in Egypt. Up to now, China has invested close to 7 billion USD in Egypt, and the two countries have confirmed plans for over 20 joint projects. Read more here and here.
 
Chinese firm, BYD announced that it signed a contract with the city of Alexandria to construct a 128km monorail. At the moment, the project cost and details remain unknown. But the agreement shows BYD’s desire to further its implantation in Egypt, beyond the vehicles already produced and sold in the country. Read more here.
 

China’s One Belt One Road
 
China emphasizes that the One Belt One Road is a mutually beneficial and a win-win solution for both developed and developing countries. China continues to promote the idea of a “community of common interest” and “community of common destiny” around the globe. Read more here.
 
Meanwhile, China is becoming increasingly involved in green financing, pushing environmentally friendly projects and sustainable development as new hallmarks of China’s developmental strategy. This week, Chinese President Xi Jinping endorsed this form of finance, facing concerns over the pollution and sustainability of his One Belt One Road initiative. Read more here.
 
According to a new report conducted by Baker McKenzie and Hong Kong Silk Road Associates, One Belt One Road related projects will be worth 350 billion USD in the next five years. The report indicates that about 60 countries are involved in the One Belt One Road, but just China and ten other markets account for two thirds of the One Belt One Road’s GDP. Those countries include India, Indonesia, Iran, South Korea, Poland, Russia, Saudi Arabia, Thailand, Turkey, and Taiwan. Read more here.
 
China has started to develop Pakistan’s Gwadar port. Gwadar serves as an important commercial hub for the China-Pakistan Economic Corridor (CPEC), since it would connect China to the Indian Ocean. The CPEC is key to China’s One Belt One Road initiative, and the project might also benefit Pakistan by stabilizing a region that has been affected by terrorism and corruption. Read more here.
 
The first China-Slovakia freight train was launched on October 27. It takes 15 days for the train to travel 10,537 kilometers from Dalian, a port city in northeast China, to Bratislava, the capital of Slovakia. Shipping via railway saves about 30 days time compared to traditional maritime shipping. Slovakia is a transit hub on the One Belt One Road, and many multinational companies build their factories there, including Samsung Electronics, Volkswagen, and Hyundai Motor. The Slovak ambassador to China, Dusan Bella, said the China-Slovakia train provides more business opportunities to logistic companies and other industries in both China and Europe. Read more here.
 
Recognizing their 60th anniversary of diplomatic ties and the 65th anniversary of the Rubber-Rice Pact, the China and Sri Lanka plan to further cooperate under the framework of China's One Belt One Road Initiative. Chinese Foreign Minister Wang Yi expressed support for a variety of development goals, which were codified by a mutual legal assistance treaty. In order to support Sri Lanka’s long-term socioeconomic development, China will support infrastructure development, bilateral investment and trade, and maritime connections. Read more here.
 

The Export-Import Bank finances the One Belt One Road in Bangladesh
 
On October 29, Chinese and Bangladeshi government representatives signed an agreement for China to finance construction of oil pipeline projects in Bangladesh. The China Export-Import bank will provide concessional loans, while the China Petroleum and Natural Gas Pipeline Bureau will carry out construction under the 550 million USD contract. This project is of great significance to China's One Belt One Road initiative because it helps to expand the Bangladesh-China-India-Myanmar economic corridor.
 
The Chinese Export-Import bank will fund Bangladesh's largest infrastructure project to date, the Padma Bridge. The travel time from Khulna to Dhaka will decrease to three and a half hours. The Chinese Export-Import Bank will have a draft of the loan in the first week of November. Read more here.
 

Updates on the Chinese Development Bank
 
The Minister of the Popular Power of Oil of Venezuela, Eulogio Del Pino, the VP of the China National Petroleum Corporation, Wang Dongjin, and representatives of the Chinese Development Bank, met to evaluate the progress of development contracts signed 20 years ago. Venezuela is looking to expand crude extraction and exportation. Meanwhile, China looks to continue all business ties which are estimated at 40 percent of the stake in oil-related transactions, despite U.S. attempts to halt trade. Read more here.
 
China Communications Construction Company (CCCC) is constructing a railway project in Malaysia, helping to connect the east and west coast in Malaysia. Meanwhile in Sri Lanka, CCCC is starting construction on a 1.4 billion USD Colombo Port City development that had been suspended for a year. The project is set to reclaim about 2.7 square kilometers of land. Both these projects are partly financed by the Chinese Development Bank (CDB). However, some concerns have been raised about the CDB's ability to preserve the environment to the same strict standards as the World Bank. Read more here.
 
The China Development Bank's Russian Siberian-Far East Working Group has issued 12.9 billion CNY in credit transfers to Russian banks to help finance the development of the Russian coastal international transport corridor. The Binhai 1 and Binhai 2 projects will pass through China's Heilongjiang and Jilin provinces as well as Russia's Vladivostok free port area. Read more here.
 

AIIB around the world…
 
The AIIB and India have signed a deal to provide 300 million USD to promote fiscal reform and better delivery of public services in West Bengal. Read more here.
 
This week, Canadian Liberals introduced a law establishing Canadian participation in the AIIB, allotting 256 million CAD to purchase shares in the development bank. The bill has been tabled because of opposition suspicion of Prime Minister Justin Trudeau and his agenda to strengthen trade relations with China. Read more here.
       
                                        
Related news: E-commerce, rise of the Yuan, and wind energy in the South China Sea    
 
China's Ministry of Finance successfully issued a 2 billion USD sovereign debt in Hong Kong. Many see this as enhancing fund accommodation between mainland China and Hong Kong, and as a mechanism that promotes One Belt One Road. In a way, this solidifies Hong Kong as a world financial center. Read more here.
 
China wants all major foreign aid commitments, including AIIB’s investments, to be in Chinese yuan. China is negotiating with Saudi Arabia to have key imports traded in CNY. This move is intended to elevate China's economic status to that of the U.S. Read more here.
 
China has announced the implementation of a new wind turbine system, called the Longyuan Zhenhua 3. The system has a lifting capacity of two thousand tons and is set to operate in the Formosa 1 offshore wind farm in the South China Sea. The region is known for its abundant wind resources, and could potentially boost international cooperation between China and countries in Southeast Asia, many of which lack the energy infrastructure needed to take advantage of wind resources. The system could accomplish this goal by providing energy and supplies to ships and other vessels that traverse the South China Sea. Read more here. 
 
Last year, China's e-commerce was valued around 1 trillion USD. Recently, Chinese technology and e-commerce firms, like Alibaba, have made moves to expand cross-border e-commerce into neighboring markets. Alibaba founder Jack Ma endorsed a plan to develop e-commerce infrastructure in the Philippines, including building new markets and strengthening logistics. The Philippines is a potentially strong emerging market, while disparities in Internet access and geography create incentives for Chinese firms to invest and boost e-commerce. Read more here.
                        
                                   
What are Japan's current opinions?
 
Japanese economist Akifumi Kuchiki writes about growing concerns in Japan about Chinese developmental finance. Japanese companies and citizens are worried about the rapid growth of the AIIB and its projects. While the AIIB is establishing partnerships with the Deutch Bank in Germany and General Electric in the U.S., the Japanese government has delayed their response to the AIIB. Read more here.
 
Ahead of President Trump's visit to Asia beginning on November 3, Japanese observers speculate that China’s strategy will be to address North Korea's nuclear and missile issues, and trade problems with the U.S., as well as long-term relationship building with the U.S. After Xi Jinping's re-election as general secretary during the 19th National Party Congress, Trump comments likening Xi Jinping to a 'king' is likely to have an impact on U.S.-Japan relations. Read more here.
 
Japan's Foreign Minister, Taro Kono, said Japan would propose dialogue with the U.S., India, and Australia, to promote free trade and strengthen defense cooperation in the South China Sea, Indian Ocean, and Africa sea areas. Garren Mulloy, an associate professor of international relations at Japan’s Daito Bunka University, believes this proposal will be beneficial to the region, but the four countries’ scale of investment will not be as much as China’s One Belt One Road initiative. Read more here.
 

China's relations in Latin America and Africa
                                                                                   
The Chinese government has taken a new interest in Ecuador, growing its credit and loan investment to help develop Chinese interest in Ecuador. Ecuador has chosen China to be the main financer of much of its development, while it could have selected other international organizations such as the IMF. Read more here. 

Algerian media TSA interviewed Yang Guangyu, the Chinese ambassador to Algeria. The ambassador talked about a new center for the Chinese visa applicants, and the Chinese-Egyptian bilateral relation in the context of Egypt’s economic crisis. He also highlighted new investment projects in Algeria, and reasserted China’s will to invest in the automobile and mineral sectors in Algeria. Read more here.
 
China and Mozambique signed an economic collaboration agreement to erase part of Mozambique’s debt that resulted from Chinese loans, which represents more than 36 millions USD. This agreement to sustain Mozambique’s economic development follows previous Chinese investment in numerous sectors, including infrastructure, energy, agriculture, tourism, mining resources, transport, and communications. Read more here.

​

​Tonga, Argentina and Madagascar join the AIIB
 
Tonga, Argentina and Madagascar have officially become members of the AIIB. In addition to increased membership, the AIIB has done well in meeting its initial goals of building a quality talent pool and developing a good management system. However, the President of AIIB has called on the AIIB to incorporate international best practices into their standards.
 

More on the AIIB…
 
Banks may now officially apply a zero risk weighting to claims on the AIIB. This will allow issuers to get the tightest pricing possible when making agreements on sovereign bonds. Read more here.
 
The President of the World Bank, Kim Yong expressed that he sees no competition between the World Bank and the AIIB. He pointed out that the purpose and concept of One Belt One Road is in accordance with the World Bank and other international financial institutions. Cooperation between the two banks is complementary and they have close relations. Read more here.
 
The AIIB, IFC, and World Bank will co-finance a new solar energy project in Egypt. ACCIONA Energy will build three solar fields with the help of the Saudi company Swicorp. Construction on the project will start in December 2018. The energy produced will avoid emitting 297,000 tons of CO2. Read more here.
 
The AIIB is investing a 297.6 million USD loan towards overhauling the Belgrade-Stara Pazova section of the railway connecting Serbia's capital to Budapest, Hungary. Read more here.
 
AIIB Vice President, Joachim von Amsberg, says there is high possibility that the bank will invest in Malaysia, especially in solar energy development programs. Amsberg also claimed that despite Western skepticism, the AIIB has proven its ability to meet infrastructural development demand while cooperating with other multi-lateral institutions. Read more here.
 

ADB investments and partnerships...
 
ADB is granting 225,000 USD through the ADB Technical Assistance Special Fund to Timor-Leste for development in the country's coffee industry, with a special focus on youth. Coffee is the country's largest non-oil export, but lack of coordination and investment has lead to industry losses. To attract youth, the project is supporting a reality TV show, “Back to the Farm”. It will show young baristas and coffee farmer teams, publicizing new quality initiatives for coffee. The show will end in the 2017 Festival Kafe Timor annual coffee celebration where ADB is supporting an "Origin Tour" where foreign coffee buyers can be introduced to the Timor market. Read more here.
 
The newly appointed Mongolian Finance Minister Khurelbaatar Chimed met with ADB Country Director in Mongolia Yolanda Fernandez Lommen to introduce Mongolia’s and the ADB's new Country Partnership Strategy 2017-2020 (CPS). The CPS contains 1.2 billion USD in support over the next four years for economic and social stability, infrastructure for economic diversification and environmental sustainability. It is mentioned that the ADB coordinated with the IMF and World Bank to create the plan. Read more here.
 
The ADB pledged 5.225 million USD to rebuild Marawi after the end of the five-month conflict with ISIL-affiliated forces. Other multilateral organizations, including the World Bank, have pledged to help rebuild Marawi and the ADB is one of the lead foreign donors. China and other regional nations have the critical skills in reconstructing war-torn regions that the Philippines desperately needs.
 
The ADB hopes that its financial contributions and experience in disaster and conflict recovery will prove a boon for Marawi and its people, to strengthen ties between China and the Philippines. There is also hope for increased investor and private sector confidence as conflict will no longer be a barrier to business. Read more here and here.
 
The ADB will help Sri Lanka prepare an electronic ticketing system in the railways to streamline public transportation and ease traffic congestion. Read more here.                                                                                                                                                       
 
The ADB recently signed a deal with the Saudi Investment Bank in Egypt to support small projects that improve work opportunities in Egypt. The move is seen as part of a larger trend in the developing relations between Egypt and China, and part of China's larger One Belt One Road Initiative. Read more here.
 
Meanwhile, representatives from the Bank of Egypt and the ADB will negotiate a 500 million USD deal to meet the needs of Chinese companies operating in the region. They hope to diversify the financing options for companies operating with Chinese partners. This encompasses transport and electricity infrastructure projects as well as smaller projects aimed at addressing unemployment. Read more here.
 
The ADB will lend 150 million USD over 15 years to Shanxi state government for an energy-saving and emission-reduction program. It the first program in China to experiment using governmental financing institute as a re-lending platform.  Read more here.
 
Odebrecht announced creation of a global council to assist the growth of companies and help fight corruption, after the scandalous ‘Operation Car Wash’ involving the Brazilian firm Petrobras. There are 10 members from various backgrounds, including Vinod Thomas, the Director General of Independent Evaluation at the ADB. This might indicate that the ADB will play a role in managing the ethics of Brazilian business practices. Read more here.
 

One Belt One Road updates
 
China expands its One Belt One Road initiative to the Arctic, signing a series of agreements on collective development of Arctic area with Russia. At the same time, China is building a large polar icebreaker with a Finnish company to improve its research in the Arctic. China has great interest in the north for several reasons. The Arctic holds one-fifth of the world's undiscovered gas and oil, it’s also the shortest and safest route from China to Europe, which can save China’s exporters time and money. In addition, cooperation with Russia on Arctic development could weaken U.S. global influence. Read more here.
 
Chinese investors have gradually withdrawn from New York housing market as the Chinese government tightened controls on foreign exchange and cracked down on corruption. But, after China’s 19th Communist Party Congress, many property developers and investors expect New York luxury home sales to heat up again. However, the Founding Chairman of Asian Real Estate Association of America, John Yen Wong pointed out China has been transferring money to countries along the One Belt One Road initiative, so New York housing market will keep cooling down in the future. Read more here.
 
An unidentified man threw a grenade into a workers’ dormitory in the Pakistani port of Gwadar, injuring 26 people. This attack has raised concern about the security of China’s OBOR initiative. Pakistan promised that it can provide security for the 57 billion USD project, but the militants have disrupted the project many times and more than 50 workers have been killed since 2014. Read more here.
 
On October 22, a delegation of Thai Ministry of Education officials, vocational school principals, and senior officials from the One Belt One Road initiative arrived at the Hunan Chemical Vocational and Technical College. They signed a cooperation agreement on the international exchange of vocational education. Projects under the agreement will include training Thai teachers in China, and student exchange programs. Read more here.
 

Chinese development partnerships around the world    
 
China’s investments in Ecuador total 11.3 billion USD in 197 deals from June 2010 to May 2017. Entities with the largest investments include the Chinese Development Bank at 7 billion USD and the Export-Import Bank at 3.46 billion USD. In addition to these infrastructure investments, El Universo Ecuador reported that the petroleum industry in Ecuador 970 million USD in debt to the Industrial and Commercial Bank of China. Read more here.
 
Funding has stalled as Zimbabwe struggles to meet standards imposed by the Chinese Export-Import Bank in order to access promised capital of 1,178 million USD. Read more here.
 
On October 21, officials from the Chinese Development Bank and the Venezuelan Government met to discuss future Chinese investment in the Venezuelan oil industry. This will continue a 20-year partnership involving export preferences for Venezuelan crude to be shipped to China. Read more here.
 
One of Russia's largest banks, VTB Bank is to provide a loan to CEFC China Energy to finance acquisition of stake in Russia's Rosneft, one of the major Russian oil companies. While the Chinese Development Bank announced it would help finance the second stage of this acquisition. Read more here.
 
The European Bank for Reconstruction and Development (EBRD) will grant 500 million USD to finance the pipeline project Trans-Anatolian Natural Gas Pipeline in Turkey. Costing nearly 40 billion USD, this project is the most important part of the Southern European Gas Corridor and is expected to improve energy security as it diversifies energy sources to Europe. The EBRD investment complements the 2 billion USD investments from the World Bank, the ADB and the AIIB. Read more here. 
 

Chinese finance partnerships: Energy buses to smart homes
 
Over the last five years, China's overseas assets of state-owned enterprises (SOEs) have grown at an annual rate of fifteen percent. This results from Chinese firms continuing to aggressively invest in new markets in Africa and Asia. These SOEs are a critical part of China's One Belt One Road initiative and focus on infrastructure development.
 
From roads to railways to communication, Chinese infrastructure investment projects partner with a variety of countries and firms, supporting its larger development framework. Over the last five years, the China Railway Construction Corporation has conducted business in 116 countries. It has supported projects such as the Haramain High Speed Rail in Saudi Arabia, the Ankara-Istanbul Railway in Turkey, and the Addis Ababa-Djibouti Railway in Ethiopia, among others.  Read more here.
 
At the 2017 Busworld Kortrijk expo in Belgium, the Zhejiang CRRC Electric Vehicle Company debuted their 12-meter MTH fuel cell city bus jointly created with a Denmark fuel cell manufacturer. China's new energy buses are the latest example of Chinese transportation firms embarking on joint ventures with European manufacturers. New technologies include smart start, automated acceleration, and obstacle avoidance features. The buses will begin trial operations in the Danish city of Alborg. China plans to further develop energy buses and to facilitate entry of Chinese buses into European markets. Read more here.
 
The Chinese telecommunications firm Huawei has created a partnership with Deyaar Development, a UAE property firm. The two firms hope to offer smart home solutions and other home technology applications. Deyaar's CEO has expressed interest in pioneering connected homes, video cloud, and other technologies while Huawei's managing director has praised the initiative as another opportunity for China to expand digital transformation of infrastructure and investment, particularly in the Middle East, a region that China has been eyeing for a long time. Read more here.
      
                                                                                                     
Currents opinions on Chinese development finance
 
The AIIB continues to show financial world leadership, while U.S. foreign involvement is declining with the U.S. withdrawal from the Trans-Pacific Partnership and renegotiations of NAFTA. The consensus of El Periodico is that the U.S. will not take part in foreign infrastructural initiatives if it is not leading the project or getting the “best” deal. This attitude is not effective, since other countries will continue to invest. Meanwhile, China makes significant moves of economic and social diplomacy, following Xi Jinping’s initiative to make China the “Middle Kingdom.” Read more here.
 
In an interview with Chinese media, the Bulgarian Journalists’ Union General Secretary, Snezhana Todorova stated she disagrees with the negative views of Chinese economic development often found in Western media. According to Todorova, China has become a stable and reliable economic partner. She emphasized China's role in the AIIB and New Development Bank as examples of its growing status in the world. She also touted the 19th National Congress as a good platform for China to broadcast its positive aspirations to the world. Read more here. 


Updates from the 19th National Congress of the Communist Party of China
 
In Xi Jinping's opening address at the 19th Party Congress, he affirms the importance of the One Belt One Road Initiative in establishing China's power internationally, saying that it will help achieve the dream of a Chinese modernized socialist society by 2049. 
                                           

Port Vila market in Vanuata.

Afghanistan joins the AIIB
                            
Afghanistan officially received permanent AIIB membership while meeting with the president of the AIIB, Jin Liqun. The AIIB and Afghanistan met at the International Monetary Fund and World Bank Autumn Annual Meeting. The two parties discussed economic issues in Afghanistan including the solar energy industry, connecting the country to other Chinese-financed transportation systems in Central Asia, and infrastructure investment projects.
 
Besides Afghanistan, China plans to invest in Central Asia’s energy and transportation infrastructure as a part of its overall development framework. Soon, the AIIB will have 70 members with the addition of Afghanistan, and the 12 more countries that await official memberships. Read more here. 
                      
                                                                         
New ADB investments...
 
The ADB is allocating 1.2 billion USD to build up the Mongolian economy from 2017 to 2020. The funds will support nearly all sectors, including infrastructure, agriculture, tourism, renewable energy, small and medium-sized enterprises, and employment for people with disabilities. The Mongolian Prime Minister Khurelsukh Ukhnaa said the Goverment's Action Plan for 2016-2020 and the Program for the Restoration of the Mongolian Economy will continue alongside, and because of this funding. Read more here.
 
The ADB increased climate financing for Pacific members to over 500 million USD for 2017 to 2020.  Fiji is receiving a 42 million USD loan to construct climate resistant water and sanitation infrastructure in greater Suva. The ADB is also granting 31 million USD to Fiji through the Green Climate Fund, which is co-financed with the European Investment Bank. Read more here. 
 
The ADB and the Vanuatu government agreed to a 15.1 million USD project for renewable energy production and increased energy accessibility on the islands of Malekula and Espiritu Santo. The project aims to provide reliable energy to the mainly rural population, and to decrease reliance on diesel fuel. A major feature of the project is the construction of a hydropower plant in Brenwe, which will be supported by the ADB-supported Pacific Renewable Energy Investment Facility. Read more here and here.
  
The ADB will invest 435 million USD in the planned Pakistan Peshawar rail project and the Rapid Transit Bus system. Read more here. 

While the ADB and AIIB granted a 1 billion USD loan to the Power Grid Corporation of India to construct a transmission system providing wind and solar power to more regions. Read more here.
 
The ADB and the New Development Bank met to discuss co-financing new operations in Asia, with a focus on new railway systems in India. They discussed the possibility of expanding into water and energy infrastructure. Read more here.
 

​Updates on Chinese financed development projects 
                                                                                               
Indonesia is set to complete the first phase of ambitious Java rail line project funded through a 4.5 billion USD Chinese Development Bank investment by 2019. The loan disbursement will begin in November. Read more here.
 
The China-Thailand high-speed railway project has been delayed to January. The 179.4 billion THB project’s environmental impact assessment report was not approved, but experts speculate that the real reason for delays is political. Read more here.
 

An update on Japan... 
 
The President of the ADB, Takehiko Nakao sees cooperation between the ADB and the AIIB as inevitable. Although the banks have different purposes, they can compliment each other, as Asia becomes the center of world economic growth. He advises Japan to welcome Chinese presence in the Asian economic circle. Cooperation between the two banks resembles cooperation between China and Japan. Read more here.

In an interview with Xinhua News, Japan’s former Prime Minister Yukio Hatoyama said Japan should take initiative to improve the China-Japan relationship. As a member of the AIIB’s international advisory panel, Hatoyama is disappointed that Japan has yet to joined the bank. He believes that Japan should not exclude itself from AIIB and should develop new cooperative foreign policies toward Asia. Read more here.
 
In addition, Japan Rail is looking to expand their involvement on Trans-Asian Railway projects. This shows Japanese discretion toward the growth of Chinese led rail projects across Asia, this including the newest 6 billion USD project that links Laos to Kunming China. Read more here.
                                                                                                            
Following the U.S. withdrawal from Trans-Pacific Partnership, Japan and the U.S. are looking to negotiate a bilateral agreement for export of U.S. agricultural products to Japan. Read more here.       
    
  
The US jabs at the World Bank

The Donald Trump administration refuses to put forth more funds into the World Bank, citing that a vast majority of the funds go towards Chinese development. China has already expressed displeasure over the World Bank’s voting structure. This new statement from the U.S. could push China to further pursue their own development endeavors and alternative policies of development finance, like the Asian Infrastructure Investment Bank and the One Belt One Road Initiative.                                                                      
 

News on China's One Belt One Road initiative

Carrie Lam, the Chief Executive of Hong Kong stated Hong Kong's plan of joining China on the One Belt One Road Initiative. The draft for this new agreement is already finished and will be ready to be signed by both parties at the end of this year. The Guangdong-Hong Kong-Macao Greater Bay Area is an important economic bridgehead. Hong Kong is most globalized of the 11 cities and will continue to use their power as the main source of contact. In order to not lag behind economically, the Hong Kong government will pursue expanding their manufacturing industries. Read more here.          
                                                              
China will launch four BeiDou-3 satellites before the end of 2017, and aims to have 18 satellites in 2018. These satellites will provide services to countries along the One Belt One Road Initiative. China plans to deploy 35 satellites around 2020 to cover the entire world. Although China states that the BeiDou satellite system is primarily for civilian use, the highly accurate navigation system is also useful for the military. Read more here.
 
At a World Bank panel discussion held in Washington D.C., the bank’s President, Jim Yong Kim expressed support of the One Belt One Road Initiative. The panel included President of the Asian Infrastructure Investment Bank (AIIB) Jin Liqun, Vice-Minister of Finance Shi Yaobin, Indonesia's Minister of Finance Sri Mulyani Indrawati, and Kazakhstan's Deputy Prime Minister Erbolat Dossaev. Both Indonesia and Kazakhstan are two target countries of the One Belt One Road Initiative. All the panelists expressed support and approval for the AIIB's spearheading of multilateral development in Asia. Read more here.
         
The French Ambassador of France Maurice Ripert reasserts the importance of the One Belt One Road Project. He said that France plans to work with China to help developing countries. The French Agency of Development will contract hundreds of millions of euros with Chinese financial partners. The Public Bank of Investment and the Caisse des Dépôts et Consignations. Read more here.
 

Chinese development finance around the world...

After the Chinese company Liugong Dressta Machinery acquired Huta Stalowa Wola (HSW), a Polish military equipment manufacturer in 2012, local workers feared wage cuts and job losses. However, 5 years after the acquisition, Chinese capital investment in Poland has led to new growth and opportunity for firms and workers. In addition to wage and aggregate economic growth, Liugong's acquisition of HSW has led to the creation of 1,200 jobs and generated over 66 million USD.
 
Overall, Chinese investment in Poland has created around 15,000 jobs and prompted closer economic ties between the two countries. As China's One Belt One Road initiative extends into Europe, Chinese firms continue to invest more in European markets, not only spurring economic growth but also gradually bringing European markets within the periphery of China's economy. Read more here.
 
The China-Portugal Cooperation Development Fund held a conference in Macao on October 12. The National Development Bank and the Macao Industrial and the Commercial Development Fund established the fund in 2013 and jointly finance its reserves. With current size of 1 billion USD, the fund aims to facilitate more partnerships between the Macao business community and projects in Portuguese-speaking countries. Read more here.
 
Morocco and China announced the creation of an economic zone in the northern city of Fez, through the China Industrial Cooperation Association. This agreement hopes to boost bilateral cooperation and attract Chinese investment in various industrial sectors, including automobile, aviation, agriculture, health and renewable energy. The mount of the investments planned remains unknown. Read more here.
         
In other news... 
             

The 19th National Congress of the Communist Party of China
 
The 19th National Congress of the Communist Party of China takes place on October 18th in Beijing. Five economic topics are expected to be discussed: new financial supervision for reducing financial risks, mixed-ownership reform in state-owned enterprises, supply-side structural reform, coordinated regional development, and the One Belt One Road Initiative.     
 

AidData releases its China’s Global Development Footprint dataset
 
At a October 12 Ministry of Commerce, a reporter cited AidData statistics while asking if Chinese aid is used to further Chinese interests. The Ministry responded that China operates under the South-South cooperation framework of equality, and the recipients need Chinese aid to develop their infrastructure. They also suggested that the AidData report might have confused China's foreign aid funds with other types of financing, like commercial funding.
  
A new AidData study reassesses the notion that China is a bad donor. Between 2000 and 2014, China gave or lent almost 350 billion USD. Researchers reckon that the doubling of Chinese grant aid is associated with a 0.4 increase in the rate of GDP growth of the recipients after two years. But the findings assert that China might do more good in developing countries if their aid came as grants instead of cheap loans. Read more here.


Opinions on Chinese development finance 


Does the One Belt One Road Initiative lack vision?
 
Fan Shih-Ping, a professor at the Institute of Political Science in the National Taiwan Normal University, finds on that China's plan for One Belt One Road lacks concreteness. Citing the UK's Financial Times, data provided from the Ministry of Commerce has shown a decrease in investment for the One Belt One Road Initiative, with a two percent decrease in 2016 and an 18 percent decrease in 2017.


The Brookings Institute on critiquing Chinese development finance

Criticism of Chinese development finance is centered on two arguments. One, China is not transparent with its data, and two, recipients of Chinese investments are often nations with poor governance structures. Given the scale of Chinese foreign direct investment, it would be fair to say that China should publish its data and be committed to transparency. But for a variety of political and economic reasons, official data is absent.
 
However, it is still possible to track investments, and with Chinese foreign direct investment, there appears to be no geographic or governance correlation. Meaning that, China is indiscriminate when considering the geographic proximity or political development of its investment recipients. The latter especially poses a problem, which China thus far has not officially addressed. Many borrowers, including Cambodia, Laos, Pakistan, Iran, Angola, Nigeria, Sudan, and Venezuela, are known for having poor governance structures (less democratic, less institutionalized, etc.)
 
This is an economic problem for China, as better governance is correlated with lower levels of risk. China is taking on a large amount of risk when investing in these countries, and the probability of a return on investment diminishes. In the case of Angola and Venezuela, China is already on track to lose large amounts of money, and this problem could spread to other recipients of Chinese investments.   

            
The European Investment Bank and the AIIB co-invest in India
                                                                                                         
 
The European Investment Bank and the AIIB will co-finance a new Bangalore Metro Rail Corporation project in India. Their investment will help construct 18 new metro stations and will purchase 96 train cars for the Rapid Transit Line. This is the first infrastructure project the two investment banks are jointly financing.
 

ADB invests in Cambodia to improve cross-border trade
 
                                                                                               
The ADB is loaning Cambodia 70 million USD as part of the ADB Greater Mekong Sub-Region Southern Economic Corridor program. The economic corridor aims to better connect Cambodia, Vietnam and Thailand for cross-border trade. The loan will fund road improvements and "hybrid project-based" agreements with contractors.
 

The ADB and World Bank invest in Sri Lankan infrastructure
 

The ADB will provide 900 million USD to upgrade Sri Lanka's road network, while the World Bank is loaning Sri Lanka 125 million USD.  The road project will be completed in 2026. Read more here.
 

The ADB will fund private infrastructure investments in Asia-Pacific
 
 
The ADB is processing 500 million USD in funding for infrastructure development in the Asia and Pacific region. Two projects are being approved through the Leading Asia's Private Infrastructure Fund (LEAP) and total over 200 million USD.
 

The ADB's role in Indonesia
 

ADB investment to Indonesia has changed from agricultural development to economic development. After the 2007 Asian Financial Crisis hit Indonesia especially hard, the ADB and other foreign investors stepped in to bolster the Indonesian economy. Since then, the ADB has expanded its loans to Indonesia and no longer limits them to specific projects. Instead, they work towards general economic structural reforms. The bank’s evolving role in Indonesia has had a positive effect on the country, aiding as a development agency and as a financial institution. 
 

The Philippines confirms their support of the One Belt One Road Initiative
 

In a forum last week in Beijing, Philippine Finance Secretary, Carlos Dominguez, reiterated the Philippine Government's support for the One Belt One Road initiative. The Chinese Commerce Department has encouraged the Philippines to utilize resources from the AIIB and the Silk Road fund for infrastructure development and this cooperation set the foundation for a supportive relationship between the two countries. Bilateral agreements have also increased, with Chinese companies increasingly investing in development of the Philippines.      
 

Japan and China look to improve relations?   
                                                                                   

Both the Japanese Prime Minister Shinzō Abe and Chinese Ambassador to Japan Cheng Yonghua want to see the Sino-Japanese relationship improve. In May, Prime Minister Abe expressed interest for Japan to join the AIIB. This would leave the U.S. as the only major nation to not participate in the organization. Prime Minister Abe also joined in a celebration for China's National Day and was the first Japanese Prime Minister to do so in more than fifteen years. It is speculated that these steps towards reconciliation are related to Japan's changing relations with the United States.
 
However, Chinese Foreign Minister Wang Yi stated shortly after that before this relationship can improve Japan must make some concession, specifically in regards to Taiwan’s recognition and Japan’s participation in U.S.-led regional war games. Read more here.
 

China encourages US participation in the AIIB
                                                                                               

The Center for China and Globalization (CCG) held a summit in Washington D.C. that introduced the prospects of Sino-U.S. cooperation. China suggested that the U.S. and China strengthen their cooperation in infrastructure constructions and trade. They also recommended that U.S. join the AIIB, and work with China to promote the One Belt One Road initiative.   
 

The US backs India
 
 
The U.S. defended India's opposition to the China-Pakistan Economic Corridor, citing that it would pass through the disputed territory of Kashmir and serves only to expand Chinese influence on the continent.                       
 

Afghan and ADB leadership reaffirm their partnership
 

ADB Vice President Wencai Zhang met with Afghanistan President Ashraf Ghani as well as the Minister of Finance and ADB Governor Eklil Ahmad Hakimi during the third Senior Officials Meeting.  They met to discuss the ADB’s new Country Partnership Strategy and to reaffirm the ADB'S commitment to Afghan infrastructure development.                                                                                                                                                                            
The ADB says Pakistan is vulnerable to climate change
 

The ADB released a report stating that Pakistan requires 40 billion USD to combat economic and developmental threats from environmental changes. The bank found agricultural issues, the need to improve road and to protect against natural disasters. So far no money has been issued.
 

Pakistan looks for foreign direct investments
 
 
The Pakistan Board of Investment is hoping to increase foreign direct investment to the country to 250 billion USD by 2025. Their plan will market the China-Pakistan Economic Corridor (CPEC) as a catalyst for further development in Pakistan and as an opportunity to maximize revenue gained from the CPEC. However, a majority of Chinese investment is distributed as loans, not foreign direct investments. Most of the projects under the CPEC are focused in the energy sector, with several infrastructure projects underway in Gwadar.
 

The Export-Import Bank finances solar energy in Argentina
 

Argentina is starting to construct the Cauchari solar park, which will be the largest in Latin America with a capacity of 300 megawatts supplied by 1.2 million solar panels. The park is expected to provide ten percent of Argentina’s power supply needs by 2028. It has attracted 511 million USD in investment from the U.S. and China. The Export-Import Bank of China will provide loans to finance part of the project. Read more here.
 

China eyes Argentina Oil Assets
 
 
China is an increasingly assertive investment player in the Western Hemisphere. In an effort to diversify its oil sources, the Chinese oil and gas company Sinopec has offered to buy out Argentinian assets valued at 1 billion USD. Attracting energy investment is a priority for Argentina and there is clear market with China, the world's second largest consumer of oil.
                                                                                                                                               
Zambia warns other African nations receiving Chinese investment
 
                                                       
Zambia has been one of the largest beneficiaries of Chinese investment through the Forum on China-Africa Cooperation, receiving over 8 billion USD. But the Zambia Institute for Policy Analysis and Research believes that China may have ulterior motives guiding its investment policy. While Chinese investment is not inherently bad, the Institute asserts that it is important for smaller African countries to evaluate the impact of Chinese investments on the trade and political imbalances associated with it.
 

Total Chinese investment in Africa reaches over 66 billion USD
 

The third Forum on China-Africa Cooperation was held this year in Dakar, Senegal. Since 2005, China has invested in 293 projects in Africa amounting to 66.4 billion USD and creating more than 130,000 jobs. More than 10,000 Chinese enterprises are investing in Africa and around 90 percent are private enterprises. This includes the construction of a pharmaceutical factory in Mali, and plans to begin constructing the Ethiopia-Hunan Industrial Park in Adama, Ethiopia.
 

The Chinese Development Bank increases funding to Africa
 
 
The Chinese Development Bank Vice President Wang Yongsheng announced the bank plans to expand 50 billion USD in loans to 43 African countries to promote the development of agriculture, manufacturing, and infrastructure.               
 
The One Belt One Road Initiative benefits the Chinese automobile industry
 

China's automobile manufacturing industry has accelerated its “going global" approach thanks to the initiatives of the One Belt One Road (OBOR) framework. The OBOR has allowed the automobile sector in China to form new partnerships, to establish joint ventures, and to compete in a business environment that is more favorable to China.
 
Chinese car brands, automobile manufacturing and production are integrating with markets abroad, supplying the growing demand from Africa to Latin America. Chinese carmakers are hopeful that the OBOR will allow the industry to compete better with Japan and South Korea, whose industries have long held influence in the global market. By consolidating efficient market strategies, China hopes to force foreign automobile firms to re-orient their strategy around Chinese auto-manufacturing.                                                            
 

GDP growth looks good for China
                                                                                                           
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The World Bank has raised China’s projected GDP growth from 6.5 percent to 6.7 percent, citing an improving external environment and rising domestic demand. The ADB also raised its growth projections for China, citing similar reasons.
 
                        

​China invests in the Philippines
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The AIIB has approved a total investment of 500 million USD for the Metro Manila Regional Flood Control Project in the Philippines. This makes China the leading lender to the Philippines for the first time. The project is co-financed by the AIIB, the World Bank and the Philippines Government. The flood control project aims to create new pumping stations and support to waterways within the metro system, and is slated for completion by May 2024. On Sept. 27, the AIIB gave its 207.6 million USD share. Read more here. 
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China and the Philippines signed a deal in March to boost cooperative development in the Philippines as part of the Six-Year Development Program for Trade and Economic Cooperation. Since then, the two countries have agreed to fast track the process and boost development projects. This includes development transportation infrastructure like rail and airports, as well as irrigation systems to aid agricultural development in the Philippines. Read the more here.

Developing Asian Infrastructure
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The AIIB announced on Sept. 29 that it would invest 150 billion USD into the International Finance Corporation's Emerging Asia Fund to address the infrastructure gap in Asia. 

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Investing in Sri Lanka’s Solar Power

                                             
The ADB has approved a 50 million USD loan Rooftop Solar Power Generation Project in an effort to help Sri Lanka's booming energy sector diversify. This loan will be primarily focused on ensuring clean energy for the country.

 
Energy Projects in India


The ADB and the AIIB are co-financing a 150 million USD electrical power project in India. The project will support building and installing five power transmission lines, which will connect to the long-distance grid systems already funded by the ADB. India's state-owned power company, Power Grid will foot the remainder of the bill, roughly another 150 million USD.
  

The AIIB and ADB are cooperating for the fourth time to carrying out a joint-financed project supporting India’s Green Energy Corridor. The project promotes the use of clean energies like solar and wind energy. The AIIB is investing 100 million USD and the ADB is investing 50 million USD.  Read more here.

                                                                                   
The ADB warns against optimism

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China continues to provide funds to help develop its neighbors and close the development gap as their economy continues to grow. However, the ADB cautions against an overly optimistic outlook of the region’s financial future, with the lingering memories of the Asian Financial Crisis. The ADB advises Asian nations to be wary of reverse flows in capital out of the region, namely to the US, The bank is also concern of the increasing debt level in many the organization’s member states, and suggests that Asian nations should pursue broad-based reforms that safeguard for financial stability.     

 
Export-Import Bank invests in Nigerian infrastructure
 

The Export-Import Bank of China gave 5.9 billion USD in loans to Nigeria to build rail links between 36 regional capitals, a project that is expected to cost up to 20 billion USD. The China Civil Engineering and Construction Corporation will handle construction.  The AIIB and World Bank are co-financing the project.

 
The Export-Import Bank of China is financing a hydropower plant and dam system in Nigeria. The China Civil Engineering Corporation will be constructing the project with the aim of bridging Nigeria's infrastructure gap, particularly in Nigeria's electricity infrastructure. Caution is warranted as previous foreign development projects in Nigeria have been unsuccessful, and such a highly ambitious projects could face delays and drawbacks. Read more here.

 
9th BRICS Summit held in China


Earlier this September, Brazil, Russia, India, China, and South Africa met to discuss China's One Belt One Road initiative. They also  discussed potentially establishing a BRICS local currency bond, a multilateral payment system, and a credit rating agency.

 
China looks to investing in Brazil’s infrastructure

 
The China-Brazil Investment Fund is expected to provide financial support for railway construction linking soybean and maize production areas with ports. However, investors warn China against hasty investment in Brazil without proper research and preparation.       
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Pakistan feels effects of Chinese development finance
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Pakistan's economy is starting to feel the effects of Chinese investment banks four years after the creation of the China-Pakistan Economic Corridor. The corridor has increased Pakistan’s debt to China and has exported important development projects to China, instead of providing construction opportunities domestically. This has lead to a negative opinion of Chinese developmental finance with some in Pakistan.